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20 Safe Dividend Stocks to Quit Your 9 to 5 Job

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·19 min read
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In this article, we will be taking a look at 20 Safe Dividend Stocks to Quit Your 9 to 5 Job. To skip our detailed analysis of dividend investing, you can go directly to see the 5 Safe Dividend Stocks to Quit Your 9 to 5 Job.

Whether you are a veteran dividend investor, or someone new to the investment strategy, early retirement and increased income are two of the main attractions offered by dividend stocks. Income investors tend to aim for increased monthly, quarterly, or yearly incomes by investing in dividend stocks like Medtronic plc (NYSE:MDT), AbbVie, Inc. (NYSE:ABBV), The Coca-Cola Company (NYSE:KO), and AT&T Inc. (NYSE:T), among others. We can't really blame them for doing so either, seeing as many individuals have historically benefitted from the financial benefits offered by dividend investing. For instance, Warren Buffett made about $4.6 billion earlier this year just through dividend payments, excluding income brought in through other stocks in his portfolio.

As such, dividend investing is treated as a strategy that can boost an investor's returns in general. Additionally, the power of compounding is such that reinvested dividends to buy more shares in pre-existing investments income investors begin receiving even more dividend payments as they go along. This can be done through dividend reinvestment plans (DRIPs), or otherwise, and typically allow income investors to use compounding to their advantage.

Moreover, an even better investment strategy can revolve around dividend growth investing. Through this, income investors looking for early and comfortable retirement can invest in businesses that seem likely to grow their dividends over time. Numerous practical examples exist to show the success of this strategy, for instance, the case of Johnson and Johnson (NYSE:JNJ), which has been raising its dividend continuously since 1997. Shareholders of this stock have witnessed dividend income increase from $0.43 per share to $3.15 per share in 1997 and 2016 respectively, for instance. This signifies an increase in income of about 7.3x.

Investing has become difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Photo by Max Harlynking on Unsplash

Without further ado, let's take a look at the 20 safe dividend stocks to quit your 9 to 5 job.

Our Methodology

Tracking the data of about 873 hedge funds for the latest quarter, Insider Monkey allows us to use hedge fund data to pick stocks that have proven to be popular among hedge funds so far this year. We also used analyst ratings to pick stocks with mostly positive ratings, and have also taken into account, past performance and core business strengths. The stocks have been ranked on the basis of their dividend yields, from lowest to highest, and the total number of hedge funds holding stakes in each stock is also mentioned.

Safe Dividend Stocks to Quit Your 9 to 5 Job

20. Emerson Electric Co. (NYSE:EMR)

Number of Hedge Fund Holders: 45

Dividend Yield: 2.1%

Emerson Electric Co. (NYSE:EMR), an industrials company, designs and manufactures technology and engineering products. The company functions in the industrial, commercial, and consumer markets across the globe. It ranks 20th on our list of safe dividend stocks to quit your 9 to 5 job.

This October, UBS analyst Markus Mittermaier reiterated a Buy rating on shares of Emerson Electric Co. (NYSE:EMR). The analyst also has a $113 price target on the shares.

19. Cincinnati Financial Corporation (NASDAQ:CINF)

Number of Hedge Fund Holders: 22

Dividend Yield: 2.12%

Cincinnati Financial Corporation (NASDAQ:CINF), a financials company, provides property casualty insurance products in the US. It ranks 19th on our list of safe dividend stocks to quit your 9 to 5 job.

Out of the 873 hedge funds Insider Monkey tracked in the second quarter, 22 hedge funds held stakes in Cincinnati Financial Corporation (NASDAQ:CINF) worth $780 million. Comparatively, 22 hedge funds held stakes in the company in the previous quarter as well. Their total stake value was approximately $886 million.

Like Medtronic plc (NYSE:MDT), AbbVie, Inc. (NYSE:ABBV), The Coca-Cola Company (NYSE:KO), and AT&T Inc. (NYSE:T), Cincinnati Financial Corporation (NASDAQ:CINF) is a notable dividend stock to invest in.

18. General Dynamics Corporation (NYSE:GD)

Number of Hedge Fund Holders: 37

Dividend Yield: 2.3%

General Dynamics Corporation (NYSE:GD) is an industrials company, ranking 18th on our list of safe dividend stocks to quit your 9 to 5 job. The company operates through its Aerospace, Marine Systems, Combat Systems, and Technologies segments.

Goldman Sachs analyst Noah Poponak this September upgraded shares of General Dynamics Corporation (NYSE:GD) from Sell to Neutral. The analyst also holds a $176 price target on the stock.

According to our data tracking, 37 hedge funds out of the 873 tracked by Insider Monkey held stakes in General Dynamics Corporation (NYSE:GD) as of the end of the second quarter of 2021.

Oakmark Funds, an investment management firm, mentioned General Dynamics Corporation (NYSE:GD) in its first-quarter 2021 investor letter. Here's what they said:

“The second new U.S. equity purchase was General Dynamics, a leading U.S. defense contractor and owner of the world’s premier business jet franchise (Gulfstream). We were able to purchase this high-quality and durable business at a meaningful discount to our estimate of its intrinsic value after a series of near-term concerns hurt its share price. Taking a longer term view, the company’s business jet franchise should benefit from a multi-year investment program in new, differentiated product. Also, its free cash flow conversion is set to improve materially and the company is poised to benefit from a highly visible ramp up in revenue related to next generation nuclear-powered submarines. As these positives come into clearer view, we expect sentiment to improve, along with the company’s share price.”

17. Raytheon Technologies Corporation (NYSE:RTX)

Number of Hedge Fund Holders: 53

Dividend Yield: 2.3%

Raytheon Technologies Corporation (NYSE:RTX) is an aerospace and defense company that provides systems and services for commercial, military, and government customers across the globe. It ranks 17th on our list of safe dividend stocks to quit your 9 to 5 job.

Morgan Stanley's Kristine Liwag holds an Overweight rating on shares of Raytheon Technologies Corporation (NYSE:RTX) as of this September.

ClearBridge Investments, an investment management firm, mentioned Raytheon Technologies Corporation (NYSE:RTX) in its second-quarter 2021 investor letter. Here's what they said:

“Broader market leadership was a relative benefit for the ClearBridge Large Cap Value Strategy, which outperformed the Russell 1000 Value Index in the second quarter… Separately, Raytheon Technologies benefited from an improving health outlook that is contributing to a faster than anticipated recovery in air travel, which should drive stronger results for Raytheon’s commercial aerospace business.”

16. Archer-Daniels-Midland Company (NYSE:ADM)

Number of Hedge Fund Holders: 41

Dividend Yield: 2.31%

Archer-Daniels-Midland Company (NYSE:ADM) is a consumer staples company that procures, transports, stores, processes, and merchandises agricultural commodities and products in the US. The company ranks 16th on our list of safe dividend stocks to quit your 9 to 5 job.

As of this October, Stephens analysts hold an Equal Weight rating on shares of Archer-Daniels-Midland Company (NYSE:ADM). The analysts also raised the price target on the company's shares from $65 to $67.

Archer-Daniels-Midland Company (NYSE:ADM) announced an EPS of $1.33 in the second quarter of 2021. This EPS beat analyst estimates by $0.30. The company's revenue was $22.93 billion, up 40.81% year over year and also beating estimates by $4.59 billion. Additionally, Archer-Daniels-Midland Company (NYSE:ADM) has also gained 9.08% in the past 6 months and 28.33% year to date.

Out of the 873 hedge funds tracked by Insider Monkey, 41 held stakes in Archer-Daniels-Midland Company (NYSE:ADM) as of the end of the second quarter. Their stake value totaled roughly $837 million for this quarter, while for the first quarter it stood at $696 million, with 34 hedge funds holding stakes in the company.

Like Medtronic plc (NYSE:MDT), AbbVie, Inc. (NYSE:ABBV), The Coca-Cola Company (NYSE:KO), and AT&T Inc. (NYSE:T), Archer-Daniels-Midland Company (NYSE:ADM) is a popular dividend stock among investors today.

15. Aflac Incorporated (NYSE:AFL)

Number of Hedge Fund Holders: 33

Dividend Yield: 2.4%

Aflac Incorporated (NYSE:AFL), a financials company, provides supplemental health and life insurance products. The company ranks 15th on our list of safe dividend stocks to quit your 9 to 5 job.

This May, Goldman Sachs analysts raised their price target on shares of Aflac Incorporated (NYSE:AFL) to $47.

Aflac Incorporated (NYSE:AFL) beat analysts' EPS estimates in the second quarter with its EPS of $1.59. The difference stood at $0.31. The company also beat revenue estimates by $197.02 million, with its $5.56 billion revenue, up 2.9% year over year. Aflac Incorporated (NYSE:AFL) has gained 5.24% in the past 6 months and 28.73% year to date as well.

The number of hedge funds holding stakes in Aflac Incorporated (NYSE:AFL) went down to 33 out of the 873 tracked by Insider Monkey as of the end of the second quarter of 2021, compared to 36 hedge funds holding stakes in the company in the previous quarter. In the second quarter, the total stake value for these hedge funds was roughly $268 million, while in the previous quarter it stood at approximately $343 million.

Like Medtronic plc (NYSE:MDT), AbbVie, Inc. (NYSE:ABBV), The Coca-Cola Company (NYSE:KO), and AT&T Inc. (NYSE:T), Aflac Incorporated (NYSE:AFL) is a dividend stock popular among hedge funds today.

Madison Funds, an investment management firm, mentioned Aflac Incorporated (NYSE:AFL) in its second-quarter 2021 investor letter. Here's what they said:

“This quarter we are highlighting Aflac (AFL) as a relative yield example in the Financial sector. AFL is a leading provider of life and supplemental medical insurance in Japan and the U.S. AFL products offer financial protection against loss of income for policy holders based on qualifying health events. Aflac Japan generates approximately 70% of total revenues, and the company has dominant market share in Japan. In the U.S., AFL provides voluntary insurance for policy holders at businesses with products sold through payroll deduction by its large sales force which sells primarily through face-to-face interactions. We believe AFL’s dominant market position in Japan and its large U.S. sales force create a sustainable competitive advantage for the company.

Our thesis on AFL is that its sales will recover from the impact of the COVID pandemic, and it will return significant amount of capital to shareholders. Sales were negatively impacted in both Japan and the U.S. but appear to be in early stages of recovering. We believe sales will improve further as economies open and new products are introduced in Japan. In the U.S., agents will be able to return to face-to-face interactions as people get vaccinated, something that was restricted last year.

In terms of capital returns, AFL committed to returning $8-9 billion between 2020-2022, which is expected to be 75% of operating earnings. The company returns capital via share buybacks and dividend increases. AFL is a Dividend Aristocrat that has increased its dividend 39 years in a row including 10% annually over the last five years; it also recently announced an 18% dividend increase. Other favorable attributes include an A- rated balance sheet by Standard and Poor’s and an attractive valuation with a relative yield near the high end of its historical range.

We believe its valuation is cheap with its forward expected Price/Earnings (P/E) ratio just 9x and a relative P/E of 0.4x versus the S&P 500 despite an industry leading return on equity. At the time of purchase, AFL had a dividend yield of 2.5% and its relative dividend yield vs. the S&P 500 was 1.8x, as shown. Some risks to the thesis include a prolonged economic downturn, loss of market share due to unsuccessful new product roll outs and potential losses in its investment portfolio.”

14. Colgate-Palmolive Company (NYSE:CL)

Number of Hedge Fund Holders: 58

Dividend Yield: 2.4%

Colgate-Palmolive Company (NYSE:CL) is another consumer staples company on our list of safe dividend stocks to quit your 9 to 5 job, ranking 14th. The company operates through its Oral, Personal and Home Care, and Pet Nutrition segments.

This October, BofA analysts reinitiated coverage of Colgate-Palmolive Company (NYSE:CL) shares with a Neutral rating. The analysts also hold an $80 price target on the stock.

While Colgate-Palmolive Company (NYSE:CL) did not beat EPS estimates in the second quarter of 2021, its $0.80 EPS was still in line with estimates. Comparatively, the company's $4.26 billion revenue was up 9.31% year over year and beat estimates by $15.21 million.

We noted that by the end of the second quarter of this year, 58 hedge funds out of the 873 tracked by Insider Monkey held stakes in Colgate-Palmolive Company (NYSE:CL). The total stake value of these hedge funds' stakes was roughly $2.4 billion. Comparatively, 48 hedge funds held stakes in the company in the first quarter of 2021. The total stake value in that quarter stood at approximately $2.3 billion.

Like Medtronic plc (NYSE:MDT), AbbVie, Inc. (NYSE:ABBV), The Coca-Cola Company (NYSE:KO), and AT&T Inc. (NYSE:T), Colgate-Palmolive Company (NYSE:CL) is a dividend stock that has consistently performed well and is thus popular among investors today.

13. The Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Holders: 68

Dividend Yield: 2.41%

The Procter & Gamble Company (NYSE:PG), a household products company, provides branded consumer packaged goods in North and Latin America, Europe, and internationally. The company ranks 13th on our list of safe dividend stocks to quit your 9 to 5 job.

BofA analysts this October reinitiated coverage of shares of The Procter & Gamble Company (NYSE:PG) with a Buy rating. The analysts also hold a $160 price target on the shares.

In the fiscal fourth quarter of 2021, The Procter & Gamble Company (NYSE:PG) announced an EPS of $1.13, beating estimates by $0.04, while its revenue was $18.95 billion, beating estimates by $569.63 million. Moreover, The Procter & Gamble Company (NYSE:PG) has gained 4.75% in the past 6 months and 4.31% year to date.

As noted at the end of the second quarter of 2021, 68 hedge funds out of the 873 tracked by Insider Monkey held stakes in The Procter & Gamble Company (NYSE:PG). Their stakes amounted to roughly $6.9 billion. In comparison, 70 hedge funds held stakes in the company in the previous quarter with a total stake value of approximately $8.5 billion.

Like Medtronic plc (NYSE:MDT), AbbVie, Inc. (NYSE:ABBV), The Coca-Cola Company (NYSE:KO), and AT&T Inc. (NYSE:T), The Procter & Gamble Company (NYSE:PG) is a dividend stock that has proven to be popular among investors today.

12. Genuine Parts Company (NYSE:GPC)

Number of Hedge Fund Holders: 29

Dividend Yield: 2.5%

Genuine Parts Company (NYSE:GPC), a consumer discretionary company, distributed automotive replacement parts and industrial parts and materials. It ranks 12th on our list of safe dividend stocks to quit your 9 to 5 job.

This September, Genuine Parts Company (NYSE:GPC) was added to Evercore ISI's Tactical Outperform List. The firm's analysts hold an In Line rating on the stock.

More hedge funds demonstrated an interest in Genuine Parts Company (NYSE:GPC) in the second quarter, as 29 hedge funds out of the 873 tracked by Insider Monkey held stakes in the company in that quarter, worth roughly $418 million. Comparatively, in the first quarter of 2021, 26 hedge funds held stakes in the company. Their total stake value was approximately $357 million.

11. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 88

Dividend Yield: 2.6%

Johnson & Johnson (NYSE:JNJ), a healthcare company, is next on our list of safe dividend stocks to quit your 9 to 5 job, ranking 11th. The company operates through its Consumer Health, Pharmaceutical, and Medical Devices segments.

Morgan Stanley holds an Equal Weight rating on shares of Johnson & Johnson (NYSE:JNJ) as of this September. The firm also holds a price target of $187 on the stock.

10. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 66

Dividend Yield: 2.71%

PepsiCo, Inc. (NASDAQ:PEP), a food and beverage company, ranks 10th on our list of safe dividend stocks to quit your 9 to 5 job. The company offers a range of food and drink products under the Pepsi, Lays, and Gatorade brands, among others.

UBS analysts hold a Buy rating and a raised price target of $172 on shares of PepsiCo, Inc. (NASDAQ:PEP) as of this October.

According to Insider Monkey's data, 66 hedge funds out of the 873 tracked held stakes in PepsiCo, Inc. (NASDAQ:PEP) worth roughly $5.2 billion, as of the end of the second quarter of 2021. This is an increase from the 61 hedge funds that held stakes in the company in the previous quarter, with a total stake value of approximately $4.9 billion.

Like Medtronic plc (NYSE:MDT), AbbVie, Inc. (NYSE:ABBV), The Coca-Cola Company (NYSE:KO), and AT&T Inc. (NYSE:T), PepsiCo, Inc. (NASDAQ:PEP) is a consistently top-performing dividend stock popular among investors.

9. The Coca-Cola Company (NYSE:KO)

Number of Hedge Fund Holders: 62

Dividend Yield: 3.1%

The Coca-Cola Company (NYSE:KO) is another food and beverage company on our list of safe dividend stocks to quit your 9 to 5 job, and ranks 9th. The company offers beverages under the Coca-Cola and other brands to consumers across the globe.

Deutsche Bank analysts have a Hold rating, alongside a $59 price target, on shares of The Coca-Cola Company (NYSE:KO) as of this October.

The Coca-Cola Company (NYSE:KO) demonstrated positive performance in the second quarter of 2021, with an EPS of $0.68, beating estimates by $0.12.

8. 3M Company (NYSE:MMM)

Number of Hedge Fund Holders: 42

Dividend Yield: 3.24%

3M Company (NYSE:MMM), an American MNC, operates in the industrial, worker safety, US healthcare, and consumer goods fields. The company ranks 8th on our list of safe dividend stocks to quit your 9 to 5 job.

Langenberg analysts this October upgraded shares of 3M Company (NYSE:MMM) from Hold to Buy. The analysts also hold a price target of $210 on the shares.

In the second quarter of 2021, 42 hedge funds out of the 873 tracked by Insider Monkey held stakes in 3M Company (NYSE:MMM) worth roughly $1.6 billion. In comparison, 41 hedge funds held stakes in the company in the previous quarter with a total stake value of approximately $1.5 billion.

7. Verizon Communications Inc. (NYSE:VZ)

Number of Hedge Fund Holders: 63

Dividend Yield: 4.9%

Verizon Communications Inc. (NYSE:VZ) is a telecommunications company and it ranks 7th on our list of safe dividend stocks to quit your 9 to 5 job.

According to our data tracked for the second quarter of 2021, 63 hedge funds out of 873 held stakes in Verizon Communications Inc. (NYSE:VZ) worth roughly $11 billion. This is compared to 69 hedge funds in the previous quarter with a total stake value of approximately $11.4 billion.

Like Medtronic plc (NYSE:MDT), AbbVie, Inc. (NYSE:ABBV), The Coca-Cola Company (NYSE:KO), and AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ) is a dividend stock that has consistently performed well for income investors.

6. Chevron Corporation (NYSE:CVX)

Number of Hedge Fund Holders: 50

Dividend Yield: 4.9%

Chevron Corporation (NYSE:CVX), a company operating in the energy industry, ranks 6th on our list of safe dividend stocks to quit your 9 to 5 job. The company is the second-largest of its kind in the US.

Truist analysts this October raised their price target on shares of Chevron Corporation (NYSE:CVX) from $145 to $150. The firm's analysts also reiterated a Buy rating on the stock.

In the second quarter, 50 hedge funds out of the 873 tracked by Insider Monkey held stakes in Chevron Corporation (NYSE:CVX) worth roughly $4.3 billion. In comparison, 41 hedge funds held stakes in the company in the previous quarter with a total stake value of approximately $4.9 billion.

Like Medtronic plc (NYSE:MDT), AbbVie, Inc. (NYSE:ABBV), The Coca-Cola Company (NYSE:KO), and AT&T Inc. (NYSE:T), Chevron Corporation (NYSE:CVX) is notable stock pick for income investors.

Click to continue reading and see the 5 Safe Dividend Stocks to Quit Your 9 to 5 Job.

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Disclosure: None. 20 Safe Dividend Stocks to Quit Your 9 to 5 Job is originally published on Insider Monkey.